Posted by PTL Group
PTL Group
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on Thursday, 09 March 2017
in Business in China

Supply Chain Management is Not Merely Managing Import and Export

Interview with PTL Group Logistic Manager—Chris Pan

Chris Pan has over 12-year operating experience at PTL Group. Chris leads the team delivering profitable integrated supply chain management solutions to bridge overseas clients’ penetration into China and assisting to build solid company reputation across diverse industries, ranging from medical equipment, electronics, security, chemical to agriculture machinery, water treatment industries. 

Q: You use the term “Fourth Party Logistics Provider” very often, would you please elaborate the meaning of the term and how it differentiates from “Third Party Logistics Provider”?

A: The concept of a Fourth-Party Logistics (4PL) Provider is an integrator that manages the resources, capabilities, and technology of its own organization and other organizations to design, build, and run comprehensive supply chain solutions. Whereas a third party logistics (3PL) service provider targets at a function, 4PL targets at management of the entire process. A Fourth-party logistics provider can also be considered a consulting firm specialized in logistics, transportation, and supply chain management. In another word, the 4PL stands on a higher level and plays an important role in managing the client’s entire supply chain.

Take PTL Group as an example, as a 4PL provider we look after the whole process of our clients’ entire supply chain ranging from the sales forecast, cash flow planning at the HQ, importation/exportation, safety storage and distribution, etc. Our customized solution can help HQ make better plan and therefore implement HQ’s strategy with operational optimization.

 

Q: How does PTL Group’s logistics management differentiate from the other 4PL providers?

A: I would say there are two main aspects we possess to distinguish from other 4PL providers: first, the supervision/monitoring of the Chinese local operation and secondly, the transparency we create for the HQ and the local team. Take a foreign company who specializes in electronic products as an example, PTL Group is their Chinese consignee to import and store their products at our Shanghai warehouse. We helped them set up a workflow plan between their HQ and China office. In this work flow plan, we communicate with HQ, China office, 3rd party vendors and warehouse to keep the communication and information transparent among all the stakeholders and at the same time, we supervise the sales team in China to make minimum 3 months sales forecast and thus make importation plan 3 months in advance. With efficient future demand prediction, the HQ can better plan on production, cash flow to ensure supply meet the predicted demand. Don't get into logistics process if you do not have transparency of the entire process. From your factory all the way to your client you need to control each part of the process and get to know who handles each part. Don't rely on subcontractor that you do not know.

Q: What are your practical reminders for overseas logistics managers?  

A: China has different customs rules from any other places around the world, which means that the HS codes, licenses that you obtained in other places may not be applicable in China. An appropriate HS code categorization is extremely important when importing goods to China. It saves your time on license issue, various inspections from Customs, etc. You can review China HS codes in the following link to get some idea: http://hs.e-to-china.com/ http://chinahscode.com/

Another reminder for overseas logistics managers will be the VAT refund issue. Quite often, when I told logistic managers from abroad that their VAT can be refunded, I always got a surprised “REALLY?” as the logistics 3rd party vendors they used before said the opposite. The fact is that import VAT can be refunded (at least 70% and up to 100%). Export VAT can be refunded depending on the type of products (between 50-80% normally). Therefore the vendors who tell you that it is not refundable probably possess the refunds as their margin.

 

Q: What do you usually include in the monthly report for the clients?

A:  For clients who use PTL as consignee, we provide the monthly report that includes the current safety stock, monthly sales report, serial numbers, and distribution report. We keep very good track of the serial numbers of the products that were sold in the market and we give very accurate and stable reference to the customer support team from clients’ side.

 

Q: Can you please give us an example of the workflow you made for our clients?

A: Please see the workflow charter below that describes the whole process of how we work with clients overseas regarding importation and sales. 

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